Air New Zealand

Wellington International Airport plans NZD300million runway extension to attract long-haul services

Wellington International Airport (WIAL) plans to extend its existing 2,000 metre runway by 300 metres so as to allow New Zealand’s capital city to attract direct long-haul services to Asia and North America using the Boeing 787 and Airbus A350.

The airport argues its geographic position at the centre of the country, and the nation’s domestic hub, means it is well placed as a third international gateway to Auckland and Christchurch. Based on its research the airport says sufficient numbers of passengers already fly to Auckland to connect with onward long-haul services to sustain a daily direct service to an Asian hub.

The exponential growth forecast from Asian markets combined with the lower operating costs and improved performance of new generation widebody aircraft are likely to make direct services to secondary destinations like Wellington a more viable proposition by the end of this decade, reducing the financial risk of extending the runway which could not have been contemplated a decade ago. Nonetheless, risk it is. But the rewards are (potentially) high.

Air Tahiti Nui plans metal neutral alliance with Air France and partners as losses continue to mount

Air Tahiti Nui has announced a planned deeper alliance with Air France on the Los Angeles-Paris CDG route and is rolling out a refurbished fleet of A340-300 aircraft to allow it to compete better with rival South Pacific carriers. But profits remain elusive for the heavily indebted carrier which survives with the support of its French Polynesian Government majority owner, which appears to be resisting a much needed restructuring of the airline.

The far flung archipelago territory’s tourism industry is slowly recovering from the effects of the global financial crisis which saw visitor numbers fall more than 40%. But while French Polynesia is benefitting from growth in tourism from Australasians eager to venture beyond Fiji, the bigger spending European market remains in decline.

Air Tahiti Nui is also facing tougher competition from a rejuvenating Air Pacific, as well as Hawaiian Airlines which has launched services to Australia and New Zealand. All provide connections to the United States and in the case of Hawaiian, as far afield as New York, making each an attractive option for an island stop-over.

Asian tourism will provide the backbone of New Zealand’s growth by 2020

Auckland International Airport (AIA), New Zealand’s main gateway, has issued a challenge for the country's tourism industry to increase visitor arrivals by nearly 60% to four million by 2020 and increase the value of individual visitors. Together this could deliver NZD9.7 billion (USD7.8 billion) in direct value to the tourism industry.

One year on from launching its Ambition 2020 initiative arrivals are slightly behind the original 2012 target, but Asian markets and in particular China have outperformed, while traditional markets including Britain, Australia and the United States have underperformed as airlines reduce or redirect capacity from markets struggling with slower economic growth.

The composition of New Zealand’s visitors has changed significantly over the past decade, driven by economic changes, the rising New Zealand dollar, aviation capacity and pricing, competition from other destinations and changes in travel preferences, according to the report.

But AIA says New Zealand must look to capture an increased share of the high opportunity emerging markets such as China, Brazil, India and Indonesia which are replacing many of the traditional markets in Europe.

Qantas-Emirates alliance: the last piece of the puzzle falls in place across the Tasman

The final piece of the Qantas-Emirates alliance has fallen into place with the New Zealand minister of transport Gerry Brownlee giving his belated approval for the two carriers to extend their union across the Tasman by authorising a master coordination agreement. This will to all intents and purposes turn the Tasman market between Australia and New Zealand into a duopoly between the Qantas-Emirates Group and Air New Zealand-Virgin Australia partnership.

The Australian Competition and Consumer Commission (ACCC) had already granted Qantas and Emirates conditional approval for the trans-Tasman leg when it gave the final green light for the pair’s broader global alliance in Mar-2013. Mr Brownlee, who under New Zealand law has the authority to rule on arrangements between two airlines where this involves price or capacity fixing of international air services, had originally been expected to make his decision by the end of Mar-2013.

Singapore Airlines cements its partnership with Virgin Australia, joining ANZ and challenging Etihad

Singapore Airlines’ (SIA) move to nearly double its holding in Virgin Australia to 19.9% reinforces the SIA Group’s new strategy of focusing more on Asia-Pacific, including the Australian market. The recent purchase of an additional 9.9% stake in Virgin Australia from founding shareholder Virgin Group also dilutes the presence of SIA rival Etihad, which now owns about a 9% stake in Virgin Australia.

Although equity is not the main driver, the increased stake could give the SIA Group an edge as it looks to further deepen its codeshare partnership with Virgin Australia, particularly in the key Australia-Europe market.

Independent Virgin Australia has quickly emerged as SIA’s most significant partner in the two years since the two airline groups first forged a codeshare agreement, a further testament to the waning importance of global alliances. SIA, which is a longstanding member of Star but has traditionally taken a passive role in the alliance, is keen to embed its relationship with Virgin Australia as other current and prospective partners circle.

Qantas and Virgin Australia build substantial virtual global networks

Australian carriers Qantas and Virgin Australia have built substantial virtual global networks with each relying on large long-haul operators to carry their passengers beyond their Asia-Pacific networks.

Qantas and Virgin Australia have recognised that as end of line carriers they cannot compete with network airlines such as the Gulf and Asian carriers that can aggregate passengers at their geographically advantageous hubs. The Australian carriers are instead using the long-haul capacity pipelines these carriers offer to serve markets they lack the capital to service in their own right.

Virgin Australia led the way, initially with a neighbourhood alliance with Air New Zealand effectively merging their trans-Tasman business. The carrier, under the stewardship of new CEO John Borghetti struck a deal with Gulf carrier Etihad, securing access to the European market. Similar deals with Delta Air Lines followed adding the United States coverage and finally perhaps the most important of them all, Singapore Airlines.

Qantas struck back with its own seismic announcement that it would partner with the biggest of them all, Emirates in a move that provides the platform to stem heavy losses on its long-haul network and return it to profit in FY2015.